ACIT-CENTRAL CIRCLE -4(3), MUMBAI , MUMBAI V. YATINDRA SATISH PAIRAIKAR, MUMBAI

ITA 4846/MUM/2025

AI Insights

The case involves appeals by the Assistant Commissioner of Income Tax against Yatindra Satish Pairaikar concerning the assessment years 2009-10 and 2010-11. The core issue was the deletion of additions made towards unexplained cash credit under section 68 of the Income Tax Act, 1961. The Assessing Officer had initially treated the unsecured loans availed by the assessee as bogus based on a report from the Investigation Wing, which suggested these were merely accommodation entries. However, the first appellate authority found that the assessee had provided sufficient documentary evidence to prove the genuineness of the loan transactions, leading to the deletion of the additions. The tribunal upheld this decision, emphasizing that the Assessing Officer had not adequately considered the evidence provided by the assessee and had relied too heavily on the Investigation Wing's report.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 791869 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: misc
• Appeal Filed On: 31-07-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVESH AGARWAL
• Assessee Lawyers: ARUN KANTI DATTA
• Keywords: Unexplained cash credit; Onus to prove; Accommodation entries; Bogus
• Section: 147; 143(3); 68; 133(6)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI JAGADISH, ACCOUNTANT MEMBER ITA Nos. 4852 & 4846/Mum/2025 (Assessment Years: 2010 & 2009) Asst. CIT-Central Circle-4(3) Room No. 424, Kautilya Bhavan, BKC, Mumbai - 400 051 Vs. Yatindra Satish Pairaikar No. 12, 3rd Floor, Ganga Smirti, Pendekar Wadi, Aarey Road, Goregaon East, Mumbai-400 065 PAN/GIR No. AKMPP 0557 F (Appellant) : (Respondent) Appellant by : Shri Pravesh Agarwal Respondent by : Shri Arun Kanti Datta-CIT DR Date of Hearing : 09.12.2025 Date of Pronouncement : 12.12.2025 O R D E R Per Saktijit Dey, Vice President: The captioned appeals by the department arise out of two separate orders, passed by the learned Commissioner of Income Tax (Appeals), Mumbai (‘ld.CIT(A) for short), pertaining to the assessment years (A.Ys.) 2009-10 and 2010-11. Both the appeals involve common issue of deletion of additions made towards unexplained cash credit u/s. 68 of the Income Tax Act, 1961 (‘the Act’ for short). 2. Briefly the facts are, the assessee is a resident individual. For the assessment years under dispute, the assessee had filed his returns of income in regular course u/s. 139(1) of the Act. For the A.Y. 2009-10, assessment was originally completed u/s. 143(3) of the Act, whereas, for A.Y. 2010-11 the return was processed u/s. 143(1) of the Act. 3. Be that as it may, subsequently, the Assessing Officer (‘A.O.’ for short) received information from the Investigation Wing, Mumbai to the effect that the assessee is a Printed from counselvise.com 2 ITA Nos. 4852 & 4846/M/2025 (A.Ys. 2010 & 2009 Asst. CIT vs. Yatindra Satish Pairaikar beneficiary of accommodation entries through bogus unsecured loans from two entities, namely, M/s Naman Exports and M/s Meridian Gems. As per the report of the Investigation Wing, the assessee had obtained unsecured loan of Rs.22,50,000/- from M/s Meridian Gems in financial year (F.Y. for short) 2009-10, corresponding to A.Y. 2010-11. Whereas, he had availed loan from M/s Naman Exports in F.Y. 2007-08 and 2008-09, aggregating to Rs.67,50,000/- and as on 31.03.2009, the closing balance of such loan stood at Rs.62,23,000/-. Based on such information, the A.O. reopened the assessments u/s. 147 of the Act. In course of assessment proceeding, the A.O. called upon the assessee to prove the genuineness of the loans availed. In response, the assessee furnished documentary evidences to prove the genuineness and creditworthiness of the creditors. However, the A.O. was not convinced with the evidences furnished by the assessee. Relying upon the report of the Investigation Wing, wherein reference was made to the statements recorded of persons connected with the lenders, the A.O. treated the unsecured loans availed by the assessee as ‘bogus’ and merely in the nature of accommodation entries. Accordingly, he treated them as ‘unexplained cash credit’ and added back to the income of the assessee, invoking the provision of section 68 of the Act. 4. The assessee contested the additions by filing appeals before ld. first appellate authority. 5. After considering the submissions of the assessee, in the context of facts and circumstances on record, ld. first appellate authority being convinced that the assessee has discharged the onus to prove the genuineness of the loan transaction, deleted the additions. 6. We have considered rival submissions and perused the materials available on record. Upon carefully going through the impugned assessment orders, we find that in Printed from counselvise.com 3 ITA Nos. 4852 & 4846/M/2025 (A.Ys. 2010 & 2009 Asst. CIT vs. Yatindra Satish Pairaikar course of assessment proceedings the A.O. had conducted independent enquiry by calling upon the assessee to furnish the details of unsecured loans availed during the period. Additionally, the A.O. had also issued notices u/s. 133(6) of the Act to the lenders/creditors to confirm the transaction by producing requisite evidences. The A.O. has accepted the fact in the assessment order that in response to the notices issued u/s. 133(6) of the Act, the lenders have furnished the requisite details, confirming the loan transaction. However, ignoring such evidences and merely relying upon the report of the Investigation Wing, the A.O. has treated the loan transactions as bogus/non-genuine. 7. Whereas, having gone through the facts and evidences, ld. first appellate authority has observed that to prove the loan transactions, the assessee had furnished copies of bank statement, confirmation, audited accounts and balance sheet, income tax return copies of the lenders, not only before the A.O. but before ld. first appellate authority. He has further recorded a finding of fact that insofar as loan availed from M/s Naman Exports, the assessee, in aggregate had taken loan of Rs.67,50,000/- through cheques on 31.03.2007 and 09.06.2008. The closing balance as on 31.03.2009, amounting to Rs.62,23,000/- was repaid by the assessee in subsequent years. Even, the loan availed of Rs.22,50,000/- from M/s Meridian Gems through cheque on 09.06.2009 and 15.10.2009 was partly repaid through cheque in the same assessment year and the balance amount was repaid in the subsequent assessment year. All evidences in relation to the repayment of the loans were also furnished before the departmental authorities. Considering the fact that the assessee has discharged its onus of proving the identity and creditworthiness of the creditors as also the genuineness of the loan transactions through proper documentary evidences, there is no justifiable reason to treat the loan transactions as bogus and in the nature of Printed from counselvise.com 4 ITA Nos. 4852 & 4846/M/2025 (A.Ys. 2010 & 2009 Asst. CIT vs. Yatindra Satish Pairaikar accommodation entries to add as unexplained cash credit u/s. 68 of the Act. The A.O. cannot make additions purely on conjecture and surmises simply relying upon the report of the Investigation Wing while ignoring cogent evidences brough on record by assessee. In view of the aforesaid, we do not find any infirmity in the decision of ld. first appellate authority. Hence, grounds are dismissed. 8. In the result, the appeals are dismissed. Order pronounced in the open court on 12.12.2025 Sd/- Sd/- (Jagadish) (Saktijit Dey) Accountant Member Vice President Mumbai; Dated : 12.12.2025 Roshani, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT - concerned 5. DR, ITAT, Mumbai 6. Guard File BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai Printed from counselvise.com "